Summaries of health policy coverage from major news organizations

FPA MEDICAL MANAGEMENT: Financial Woes Worsen

San Diego-based FPA Medical Management Inc. "missed an interest payment" of $2.6 million this week, suggesting that "FPA's cash crisis is worsening," the Wall Street Journal reports. The physician-management company had been given a June ll deadline by its investors to restructure its debts. But on Tuesday FPA did not make the interest payment on its $75 million debt, and if the company doesn't make the payment within 30 days, "bondholders can demand full repayment." The California Department of Corporations is currently monitoring FPA's financial situation, the Journal reports. Julie Stewart, assistant commissioner of public affairs for the department, said the state is "conducting a nonroutine financial exam."

The Check's Not In The Mail The Journal also reports that FPA is not paying many of its doctors in California, Nevada and Arizona, with some doctors saying payments stopped two months ago. "It's becoming a huge issue here," said Elizabeth McNeil, the California Medical Association's director of medical policy and economics. Bill Sandberg, executive director of Sacramento-El Dorado Medical Society, said doctors "are 'submitting and resubmitting bills' to no avail." One Placerville pediatrician said FPA told him "the checks have been cut" but not sent out because there is no money to back them. FPA President and CEO Stephen Dresnick "acknowledged" doctors are not getting paid, particularly in California: "There are some isolated pockets where we are probably 60 days behind." The Journal reports that $15 million worth of claims are past due -- "a very small percentage" of FPA's $120 million monthly revenue, Dresnick said. Dresnick said the payment problems are "exacerbated" by health plans not paying FPA, and that the doctors will get their money as soon as the health plans pay up. In Nasdaq trading yesterday, FPA shares dropped 27%, losing 43.75 cents to close at $1.1875 (Rundle, 6/19).

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